The payment protection insurance scandal created many problems for consumers, regulators and other businesses throughout the country. Parliament and financial regulators are working hard to prevent another financial scandal from occurring. Lawmakers recently proposed changes to the existing Approved Persons Regime. The FCA said that it supports overhauling the law and will share its insight.
Problems with Current Approved Persons Regime
The Approved Persons Regime stipulates who is allowed to work with customers and handle their property. They were supposed to help prevent customers from being exploited and deter employees from promoting products they didn’t have experience with.
However, the Fincial Conduct Authority (FCA) and lawmakers feel that the existing laws have been ineffective for protecting customers. Many of the employees who sold PPI and other insurance products clearly didn’t understand how they actually worked. There are also a number of concerns about the qualifications of many employees evaluating claims. The Institute of Financial Services has recently decided to change its training methodology to ensure claims handlers, salespeople and other professionals have the background needed to do their jobs effectively.
The FCA and lawmakers clearly concur with the IFS’s position. They hope that revising the law will keep unqualified people from representing customers. They haven’t stated whether those laws will only affect bank employees or those of PPI claims companies like www.PPIClaimsAdviceline.com as well.
FCA Chairman Feels Changes are Necessary
John Griffith-Jones, the chairman of the FCA, said that the new changes are necessary. Griffith-Jones said that the current Approved Persons Regime has failed. The PPI scandal was clear evidence that a new framework needs to be instituted as soon as possible.
Griffith-Jones feels that the existing system is so poorly setup that the government can’t try to build off of it. He said that the only option is to create a new system from scratch.
Senior Person Regime
The new system would be called the Senior Person Regime. A senior staff member would be held accountable for any decisions that occur within the organization. They would be required to work with regulators and suffer the consequences of any violations.
Griffith-Jones and other regulators feel that this is one of the most important things that was lacking in the PPI scandal. There was a serious lack of accountability so nobody felt personally vested in making sure regulations were followed properly. The new Financial Conduct Authority believes that appointing a person in each department to be accountable for regulatory infractions would great reduce the chances of another PPI scandal or other financial crisis.
